The Federal Court in Perth last week handed down its final orders in the long running Western Australian air conditioning cartel case which had involved bid-rigging and price fixing on projects valued at over $100 million.
Over the duration of the proceedings, the court has imposed a total of $9.2 million in pecuniary penalties making this the largest trade practices case ever run in Western Australia.
Projects affected included an AMP refurbishment ($9.49 million), CSIRO - Petroleum and Minerals, Bentley ($5.23m), Belmont Shopping Centre ($2.67m), UWA Electronic/Electrical Engineering ($919,800), Nickol Bay Hospital - Chillers Replacement ($568,200), Chisholm Catholic College ($654,383), Rydges Hotel Chiller ($211,000) and Murdoch University Education and Humanities ($280,510).
The cartel engaged in bid-rigging and price-fixing affecting the supply and installation of commercial and industrial air conditioning and mechanical services in WA.
The ACCC began proceedings in December 2004 against 17 companies and 22 individuals.
Pecuniary penalties totalling $9,272,000 were imposed on respondents in these proceedings.
"The ACCC is pleased these proceedings have been concluded," ACCC chairman Graeme Samuel said. "This is a timely reminder to businesses who may be tempted to engage in illegal cartel conduct that the ACCC will not hesitate to investigate and prosecute those involved in such conduct.
"Furthermore, given recent amendments to the law, individuals who are involved in serious cartel conduct of the type subject to these proceedings now face the prospect of criminal prosecution and the risk of imprisonment for up to 10 years."
The matter came to the ACCC's attention after a trade practice law compliance review of Tyco and its subsidiaries, following its involvement in a Queensland fire protection price-fixing case. Three Tyco companies and several individuals entered into leniency agreements with the ACCC. Other respondents entered into cooperation agreements with the ACCC.
In its case the ACCC had alleged that the companies breached the Trade Practices Act 1974 by entering into arrangements or understandings which involved some or all of the various parties agreeing which company among them would submit the lowest tender price for particular commercial projects let for tender.
For some periods from 1997 to June 2003 some of the respondents, who were members of the Air Conditioning and Mechanical Contractors' Association of WA, would attend regular weekly meetings at the AMCA premises at which they would discuss upcoming tenders and endeavour to agree which tender would be designated to submit the lowest price.
The companies gave effect to the arrangements by providing and accepting 'cover prices'. It is alleged that the conduct generally involved the supply and installation of air conditioning and mechanical services on major construction projects, both private and public.
It was also alleged that the conduct took place up until around 2003 and that some companies had been engaged in the conduct since the early 1990s.
Price fixing and bid rigging behaviour the subject of these proceedings affected tenders for air conditioning projects totalling about $129 million.
To finalise the case, the Federal Court handed down orders, including declarations, injunctions and costs, on Mr Martin Roche, a former senior employee of Haden Engineering Pty Ltd. The allegations against all the respondents, including Mr Roche, were resolved by consent between the parties.
Proceedings against the fourteenth respondent Norfolk Holdings Group Pty Ltd were discontinued.